New Delhi: Market regulator SEBI has slapped a fine of Rs 1 crore on HDFC Bank on Thursday. The bank is alleged to have mortgaged the securities of stockbroker BRH Wealth Kreators. This has violated the interim guidelines of the regulator. SEBI has also directed HDFC Bank to keep an escrow account with a 7 percent interest of Rs 158.68 crore unless the client's issue is settled.
The recent case began when HDFC Bank mortgaged securities in violation of the interim order issued by SEBI on October 7, 2019, against BRH Wealth Kreators and other companies. In its interim order, SEBI has ruled out BRH for any kind of undertaking or activities in securities. SEBI had said that its assets would be used only in the delivery of money or securities.
It means that it will include BRH properties and securities that it has collected funds by mortgaging. At the same time, SEBI had also asked the bank and the depositors not to give any money from BRH accounts or Demat accounts. SEBI came to know that HDFC bank on October 14, 2019, mortgaged BRH securities and paid Rs 158.68 crore. However, SEBI has now directed to keep it in the Raashi escrow account with 7 percent interest.